Novanta (NasdaqGS:NOVT) - Share price, News & Analysis

Q: What is the Fair Price of NOVT when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

NOVT ($127.63) is trading above our estimate of [[fair value]] ($98.35)

NOVT fundamental analysis
Snowflake Score
Valuation	0/6
Future Growth	2/6
Past Performance	3/6
Financial Health	2/6
Dividends	0/6

NOVT Stock Overview

Rewards

Earnings are forecast to grow 18.97% per year

Earnings have grown 3.4% per year over the past 5 years

Risk Analysis

Debt is not well covered by operating cash flow

Large one-off items impacting financial results

Novanta Competitors

National Instruments

NasdaqGS:NATI

US$4.3b

Vontier

NYSE:VNT

US$3.7b

Coherent

NasdaqGS:COHR

US$6.6b

Badger Meter

NYSE:BMI

US$2.4b

Price History & Performance

Summary of all time highs, changes and price drops for Novanta
Historical stock prices
Current Share Price	US$127.63
52 Week High	US$184.44
52 Week Low	US$110.84
Beta	1.11
1 Month Change	1.53%
3 Month Change	-11.44%
1 Year Change	-4.66%
3 Year Change	37.79%
5 Year Change	250.15%
Change since IPO	700.81%

Recent News & Updates

Jun 09

At US$124, Is Novanta Inc. (NASDAQ:NOVT) Worth Looking At Closely?

Novanta Inc. ( NASDAQ:NOVT ), might not be a large cap stock, but it saw significant share price movement during recent...

May 10

Calculating The Fair Value Of Novanta Inc. (NASDAQ:NOVT)

In this article we are going to estimate the intrinsic value of Novanta Inc. ( NASDAQ:NOVT ) by estimating the...

Apr 22

Novanta (NASDAQ:NOVT) Seems To Use Debt Rather Sparingly

The external fund manager backed by Berkshire Hathaway's Charlie Munger, Li Lu, makes no bones about it when he says...

Shareholder Returns

	NOVT	US Electronic	US Market
7D	13.7%	5.0%	6.3%
1Y	-4.7%	-19.8%	-18.8%

Return vs Industry: NOVT exceeded the US Electronic industry which returned -19.7% over the past year.

Return vs Market: NOVT exceeded the US Market which returned -18.4% over the past year.

Price Volatility

Is NOVT's price volatile compared to industry and market?
NOVT volatility
NOVT Average Weekly Movement	5.3%
Electronic Industry Average Movement	7.4%
Market Average Movement	8.1%
10% most volatile stocks in US Market	16.7%
10% least volatile stocks in US Market	3.2%

Stable Share Price: NOVT is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: NOVT's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1968	2,700	Matthijs Glastra	https://www.novanta.com

Novanta Inc., together with its subsidiaries, designs, manufactures, markets, and sells photonics, vision, and precision motion components and sub-systems to original equipment manufacturers in the medical and industrial markets worldwide. The company’s Photonics segment offers photonics-based solutions, including laser scanning and beam delivery, CO2 laser, solid state laser, ultrafast laser, and optical light engine products serving photonics-based applications for industrial processing, metrology, medical and life science imaging, DNA sequencing, and medical laser procedures. It’s Vision segment provides a range of medical grade technologies, including medical insufflators, pumps, and related disposables; visualization solutions; wireless technologies, video recorders, and video integration technologies for operating room integrations; optical data collection and machine vision technologies; radio frequency identification technologies; thermal chart recorders; spectrometry technologies; and embedded touch screen solutions.

Novanta Fundamentals Summary

How do Novanta's earnings and revenue compare to its market cap?
NOVT fundamental statistics
Market Cap	US$4.56b
Earnings (TTM)	US$57.84m
Revenue (TTM)	US$748.43m

78.8x

P/E Ratio

6.1x

P/S Ratio

Is NOVT overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
NOVT income statement (TTM)
Revenue	US$748.43m
Cost of Revenue	US$420.55m
Gross Profit	US$327.88m
Other Expenses	US$270.03m
Earnings	US$57.84m

Last Reported Earnings

Apr 01, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	1.62
Gross Margin	43.81%
Net Profit Margin	7.73%
Debt/Equity Ratio	78.1%

How did NOVT perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

Is NOVT undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

0/6

Valuation Score 0/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for NOVT?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for NOVT. This is calculated by dividing NOVT's market cap by their current preferred multiple.
What is NOVT's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$4.56b

NOVT key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	6.6x
Enterprise Value/EBITDA	34.5x
PEG Ratio	4.2x

Price to Earnings Ratio vs Peers

How does NOVT's PE Ratio compare to its peers?

NOVT PE Ratio vs Peers

The above table shows the PE ratio for NOVT vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	35.4x
NATI National Instruments	39x	28.0%	US$4.3b
VNT Vontier	6.5x	2.8%	US$3.7b
COHR Coherent	57.7x	40.8%	US$6.6b
BMI Badger Meter	38.4x	8.7%	US$2.4b
NOVT Novanta	78.8x	19.0%	US$4.6b

Forward PE

Price-To-Earnings vs Peers: NOVT is expensive based on its Price-To-Earnings Ratio (78.8x) compared to the peer average (35.4x).

Price to Earnings Ratio vs Industry

How does NOVT's PE Ratio compare vs other companies in the US Electronic Industry?

Price-To-Earnings vs Industry: NOVT is expensive based on its Price-To-Earnings Ratio (78.8x) compared to the US Electronic industry average (17.6x)

Price to Earnings Ratio vs Fair Ratio

What is NOVT's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

NOVT PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	78.8x
Fair PE Ratio	23.1x

Price-To-Earnings vs Fair Ratio: NOVT is expensive based on its Price-To-Earnings Ratio (78.8x) compared to the estimated Fair Price-To-Earnings Ratio (23.1x).

Share Price vs Fair Value

What is the Fair Price of NOVT when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: NOVT ($127.63) is trading above our estimate of fair value ($98.35)

Significantly Below Fair Value: NOVT is trading above our estimate of fair value.

Price to Earnings Growth Ratio

PEG Ratio: NOVT is poor value based on its PEG Ratio (4.2x)

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Future Growth

How is Novanta forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

19.0%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: NOVT's forecast earnings growth (19% per year) is above the savings rate (1.9%).

Earnings vs Market: NOVT's earnings (19% per year) are forecast to grow faster than the US market (13.9% per year).

High Growth Earnings: NOVT's earnings are forecast to grow, but not significantly.

Revenue vs Market: NOVT's revenue (8.1% per year) is forecast to grow slower than the US market (8.4% per year).

High Growth Revenue: NOVT's revenue (8.1% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if NOVT's Return on Equity is forecast to be high in 3 years time

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Past Performance

How has Novanta performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

3.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: NOVT has a large one-off loss of $18.7M impacting its April 1 2022 financial results.

Growing Profit Margin: NOVT's current net profit margins (7.7%) are higher than last year (7.3%).

Past Earnings Growth Analysis

Earnings Trend: NOVT's earnings have grown by 3.4% per year over the past 5 years.

Accelerating Growth: NOVT's earnings growth over the past year (31.8%) exceeds its 5-year average (3.4% per year).

Earnings vs Industry: NOVT earnings growth over the past year (31.8%) underperformed the Electronic industry 33%.

Return on Equity

High ROE: NOVT's Return on Equity (10.8%) is considered low.

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Financial Health

How is Novanta's financial position?

Financial Health Score

2/6

Financial Health Score 2/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: NOVT's short term assets ($375.4M) exceed its short term liabilities ($183.0M).

Long Term Liabilities: NOVT's short term assets ($375.4M) do not cover its long term liabilities ($488.5M).

Debt to Equity History and Analysis

Debt Level: NOVT's net debt to equity ratio (59.6%) is considered high.

Reducing Debt: NOVT's debt to equity ratio has increased from 37.3% to 78.1% over the past 5 years.

Debt Coverage: NOVT's debt is not well covered by operating cash flow (19.8%).

Interest Coverage: NOVT's interest payments on its debt are well covered by EBIT (10.5x coverage).

Balance Sheet

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Dividend

What is Novanta current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate NOVT's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate NOVT's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if NOVT's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if NOVT's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as NOVT has not reported any payouts.

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Management

How experienced are the management team and are they aligned to shareholders interests?

4.2yrs

Average management tenure

CEO

Matthijs Glastra (52 yo)

5.75yrs

Tenure

US$12,375,690

Compensation

Mr. Matthijs Glastra has been the Chief Executive Officer and Director of Novanta Inc. since September 1, 2016 and serves as its Chairman of the Board since May 13, 2021 and served as its Executive Officer...

CEO Compensation Analysis

Compensation vs Market: Matthijs's total compensation ($USD12.38M) is above average for companies of similar size in the US market ($USD6.87M).

Compensation vs Earnings: Matthijs's compensation has increased by more than 20% in the past year.

Leadership Team

Experienced Management: NOVT's management team is considered experienced (4.2 years average tenure).

Board Members

Experienced Board: NOVT's board of directors are considered experienced (4.1 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/27 00:00
End of Day Share Price	2022/06/27 00:00
Earnings	2022/04/01
Annual Earnings	2021/12/31